Ichimoku parameters for intraday trading. Ichimoku indicator (download) - detailed description, settings

Every trader at least once heard about the Ichimoku Kinko Hyo indicator. This indicator was created in Japan by a certain analyst Goichi Hosoda, but in the literary circle it was known as Ichimoku Sanjin (Ichimoku Sanjin).

This tool was originally created for the Nikkei index, but later it was used to analyze all assets. Although it is customary to use it in pairs where JPY is present.

Features of using the Ichimoku Kinko Hyo indicator

The Ichimoku Kinko Hyo indicator has proven itself in Forex trading, as it helps to accurately determine the levels at which you need to enter and exit the market, as well as correctly place limits and even stop loss orders. But these questions are of most interest to any trader.

If you translate Ichimoku Kinko Hyo into Russian, you get " look at the equilibrium graph».

And this is how the indicator looks on the chart:

Description of the Ichimoku Kinko Hyo indicator

So, our indicator consists of the following indicator lines:

• Tenkan-sen;
• Kijun-sen;
• direct Senkou Span A;
• and the second Senkou Span B;
• and Chinkou Span.

Let's take a look at each indicator one by one...

Tenkan-sen (aka Tenkan Sen)

The red line Tenkan Sen is the “turn line”. Shows the average of the maximum and minimum prices for the last 9 periods.

Kijun-sen (aka Kijun Sen)

The blue of the Kijun Sen lines is the main, main line. Specifies the average value of the maximum and minimum prices for 26 periods.

Senkou Span A (aka Senkou Span)

Orange line Senkou Span: displays the average shifted value for 26 periods forward between 2 lines:

• blue
• and red.

Senkou Span B (aka Senkou Span)

The second orange line reports between the low and high prices taken over the last 52 periods, shifted forward by 26 periods.

Chinkou Span (aka Chikou Span)

The green one of the Chikou Span lines is the "delay line". It displays the closing price of the current candle, which has a shift of 26 periods.

When the green line of the Chikou Span crosses prices from the bottom up, you need to get ready to buy. Visually it looks like this:

Figure 2. Buy signal based on the Ichimoku indicator

If the price crosses from top to bottom, get ready to sell.

Figure 3. Sell signal based on the Ichimoku indicator

Finally…

Now you know how to practice Ichimoku Kinko Hyo. Naturally, the variety of colorful lines that our indicator shows may seem confusing. But don't be afraid of this. Read the description of the indicator again to understand it properly. Who knows, maybe it will be for you. Moreover, its lines show not only the levels of support and resistance, but also the trend and further direction of the price.

Application of Ichimoku Kinko Hyo in practice

The Ichimoku indicator is a versatile indicator that simultaneously provides information about support/resistance levels, trend direction and momentum.

The Ichimoku indicator is a very powerful tool, however, many traders get dizzy when looking at all the lines and volume of information that the indicator gives them, so they often misinterpret the Ichimoku signals.

In this article, we will fully analyze the Ichimoku indicator and demonstrate step by step how to use this tool to make trading decisions.

First step: parsing the indicator

The Ichimoku indicator consists of two separate components

1. Coup and standard lines. They look like moving averages, but they are different, as you will see shortly.
2. Ichimoku cloud. The cloud is the most famous part of the indicator because it is more conspicuous than anything else.

Please note that in this article we are focusing on those aspects of the Ichimoku indicator that are related to momentum and trend trading. Ichimoku's lag level is intentionally omitted as it doesn't really matter.

Now let's take a look at each component individually and then put it all together to help you find the best trading signals.

Coup and standard lines

As mentioned earlier, the Conversion and Standard lines look like moving averages, but perform slightly different tasks.

The reversal and standard lines show the average value of the sum of the high and low prices for 9 and 26 periods.

This means that the periods 9 and 26 are used for their calculation, the highest and the lowest are taken. price levels during these periods, and a line is drawn through the middle of this range.

In the screenshot below, the green and red lines are Ichimoku's standard and flip lines.

For comparison, we also plotted the moving average for 9 periods on the chart, marking it in white; the moving average is very similar to the flip line, but does not match it 100%.

Tenkan Sen / Reversal Line: The average of the high and low prices over 9 periods.

Kijun Sen / Standard Line: The average of the high and low prices over 26 periods.

Signals and Meaning of the Flip and Standard Lines

Conversion and standard lines serve two purposes: firstly, they act as support and resistance levels during a trend, just like moving averages.

Second, they provide momentum information. When the price is above these two lines and the reversal line is above the standard line, the momentum is bullish.

They are also very similar to moving averages: if the shorter moving average rises above the longer moving average, this also shows that the momentum is rising.

• The reversal and standard lines act as support and resistance levels during trends.
• When the price is above these two lines, open only buy trades, when the price is lower - sell trades.
• Crossing of two lines confirms the momentum
  • when the shorter-term line rises above the long-term line, it shows an increase in bullish momentum (and vice versa);
  • momentum is confirmed when the price rises above the two lines.

Ichimoku cloud

The Ichimoku cloud consists of a lower and an upper border, and the space between these two lines is often shaded in green or red. Let's see what that means.

The first and faster edge of the cloud is the average between the standard and reversal lines.

The second, slower border is the middle between the maximum and minimum price for 52 periods. An important characteristic of the Cloud is that it is projected into the future for 26 periods.

Again, in the screenshot below, we placed two regular moving averages next to the Cloud and used an offset of 26 (shifted the moving averages into the future).

It can be seen that the moving averages almost coincide with the Ichimoku Cloud.

Senkou A is a faster moving border: the average between the reversal and standard lines.

Senkou B is a slower moving border: the average of the high and low prices over 52 periods.

Important note. The cloud is shifted into the future by 26 periods.

Signals and meaning of the Ichimoku Cloud

In general, the Cloud is very similar to the flip and standard lines, since its two boundaries are based on the same premises.

First, the cloud acts as a support and resistance level and provides information about trend direction and momentum.

But, since the Cloud uses a period of 52 (rather than 9 and 26), it moves slower than the reversal and standard lines.

In general terms, the Cloud confirms an uptrend when the price is above it and a downtrend when the price is below it.

The space inside the Cloud is called the noise zone, and trading here is best avoided. When the Cloud is green, we have an increased growth, and when the Cloud is red, a strong downtrend is confirmed.

Thus the Cloud is a way to trade longer term trends and this allows us to sum up the following.

• Trading with the trend is carried out depending on which side of the Cloud is the price.
• The cloud can act as support and resistance during trends.
• The area inside the Cloud is called the noise zone.

Signals - how to use the Ichimoku indicator to find trades

Having a clear understanding of what the individual components do, what signals they give and what they mean, we can move on to using the Ichimoku indicator to analyze price charts and generate trading signals.

Cloud: long-term trend, resistance and color

With the help of the Ichimoku Cloud, traders can easily filter out long-term uptrends and downtrends.

When the price is below the Cloud, the trend is down and vice versa.

During strong trends, the Cloud also acts as support and resistance boundaries, and in the screenshot below, you can see how the price continues to bounce off the Cloud during trend waves.

Thus, the cloud is ideal for filtering the bullish and bearish phases of the market.

However, like most momentum indicators, the Ichimoku Cloud loses its relevance during a flat.

Quick signals of the flip and standard lines

The Conversion and Standard lines are the fastest moving components of the Ichimoku indicator and provide the earliest momentum signals.

In the screenshot below, we have marked the various points with numbers from 1 to 4, and now we can look at them in order to understand how to use the flip and standard lines correctly.

1. The flip line rises above the standard line, which is a bullish signal. At the same time, the price is above both lines, which confirms the uptrend. The price momentarily falls back into the Cloud, but immediately meets support. This situation can be considered as an entry point.
2. The price started trying to break through the standard line (yellow), which is a warning signal about a trend change. The reversal and standard lines also crossed to the bearish side, further confirming the change in momentum. Finally, the price entered the cloud, confirming the change.
3. The price has gone down hard below the standard and reversal lines, while the reversal line is also crossing the standard line - both of these signals are bearish. At the same time, the price was below the Cloud. All of these signals confirm a strong downtrend and could be used to enter a sell position.
4. The price has started trying to break through the standard line, which is an early warning signal. After that, the reversal and standard lines continued to intersect with each other, which once again confirmed the change in momentum. Eventually the momentum faded and the price began to consolidate sideways.

RSI and confluence of factors

In trading, the issue of factor fusion is very important, which means combining different trading tools and concepts to create a more reliable trading method.

When exiting a trade with a trend due to the relevant Ichimoku signals, there are a few things you should consider

• If, during a downtrend, the price rises above the pivot and standard lines, this may signal a temporary change in momentum.
• But while the Cloud is held as resistance, the trend is not yet considered broken.
• When the price breaks above the Cloud, the downtrend ends.
• Traders can use Ichimoku for both conservative and aggressive exit options:
  • Conservative exit (1). A more conservative trader would exit his trades as soon as the reversal and standard lines cross in the opposite direction of the current trend. Such a trader usually avoids the increased volatility that often occurs before a reversal. On the other hand, it may miss future trend moves when the price reverses in the original direction; not all intersections of the reversal and standard lines lead to trend reversals.
  • Aggressive exit (2). A trader who wants to stay in a trend trade for a longer time only exits the trade after the price breaks the cloud in the opposite direction. The advantage is that in some cases it will be able to hold trend trades for much longer and be less vulnerable to temporary corrections. On the other hand, it is possible that he will exit some of his trades too late and may end up losing a significant amount of his profits, because the Cloud crossing usually occurs very late.

Conclusion. Ichimoku indicator is a very reliable trading framework

In general, the Ichimoku framework is a very solid universal indicator that provides a lot of information at the same time.

As we have already shown, there are no secrets in the use and interpretation of the Ichimoku indicator, and its individual components are very closely correlated with moving average trading.

However, the Ichimoku indicator definitely has its own niche, and traders who use strategies based on it get a very reliable framework.

To sum it up, let's list the most important points that you should know when trading using the Ichimoku indicator.

• Use the Cloud for identifying the direction of a long-term trend. Trade only in the direction of the Cloud.
• cloud can act as support and resistance during trends. But when price enters the Cloud, it signals a change in momentum.
• When the flip line intersects with the standard line and is on top– this can be considered a shift in the direction of the bullish trend.
• During a trend flip lines and standard act as support and resistance.
• You can trade only in the direction of the flip and standard lines.
• The trader can either use flip and standard lines for exit from transactions(conservative option), or wait until the price breaks through the Cloud (more risky option).
• During a flat, the Ichimoku indicator loses its strength.

Hello, dear readers, fellow traders!

"Ichimoku" ("Ichimoku Kinko Hyo")- a very good and nice-looking classic indicator, which is essentially a self-sufficient effective tool that does not require the use of any mandatory additions, but for more efficient trading, of course, it can be combined with something else, first of all - analysis Japanese candles.

Today we will get acquainted with the settings, technical characteristics of Ichimoku; let's analyze important nuances and options for using it in trade. We will also consider in detail the various signals that this indicator gives us; the subtleties of entries and the installation of "stops". In addition, let's look at examples of the combined use of the indicator and candlestick analysis, and at the end of the article we will summarize.

Characteristics and history of the indicator

• Recommended broker for trading
• MetaTrader of any version, the indicator is present in the terminal by default
• any
• H1 and larger, the most suitable - H4 and D1
• any

History of appearance. This indicator was created by the Japanese trader and analyst Goichi Hosoda back in the 1920s. His pseudonym was Sanjin Ichimoku (roughly translated from Japanese - "Sharp-eyed from the mountains"), hence the name of the development and the concept of the indicator - to quickly determine the entire situation on the market at a glance without additional tools. Since externally the indicator forms a certain area on the chart, it is also called the Ichimoku Cloud. The author worked for a long time on improving his instrument, and in the 60s his works gained great popularity among merchants already in the West.

Many traders in our time successfully build their strategies using this indicator. Initially, it may seem confusing or not clear enough to beginners, but having understood the principles and nuances of work, you will receive an excellent tool for trading in your “piggy bank”.

Appearance and calculation of indicators

The appearance of "Ichimoku" is peculiar, in fact - a ready-made foundation for compiling your own trading strategy:

The numbers on the chart show:

1. "Tenkan Sen" ("Tenkan Sen", Line of rotation)- denoted in red and is the fastest responding sliding indicator, defining short-term trends.
2. "Kijun Sen" ("Kijun Sen", Reference or "Standard" Line)- color blue, determines medium-term trends.
3. "Senkou Span "A"" ("Senkou Span "A", First Preemptive)- one of two leading moving averages that form a "cloud".
4. "Senkou Span "B"" ("Senkou Span "B", Second Preemptive)- the second and most important leading moving average.
5. "Cloud Ichimoku" (or "Kumo" ("Kumo"))- shaded area.
6. "Chinkou Span" ("Chinkou Span", Delayed)- lagging moving average following the price (green on the chart).

Calculation of indicators of the indicator. The moving Tenkan Sen is calculated as the average between the maximum and minimum of the last 9 candles, including the current one (the number of candles is specified by default, the value can be changed in the settings). "Kijun Sen" is calculated in a similar way, only for a longer period of time (the default is 26 candles).

"Senkou Span "A"" is the average between "Kijun Sen" and "Tenkan Sen", shifted 26 candles forward. "Senkou Span "B"" - the average value between the high and low of the period of 52 (default) candles, also shifted forward by 26 bars. The space between these 2 lines forms a "cloud", which is displayed shaded in orange or purple, depending on which of the lines is located above.

"Chinkou Span" (lagging green line) - shows the price of the current candle, but shifted 26 candles back.

Formulas. When calculating, 3 time intervals are considered: T1< T2 < T3 (по умолчанию: 9 свечей < 26 < 52). Текущий временной интервал обозначим T (текущий бар). Тогда расчёты следующие:

• Turning line [for the current bar T] = (high price (high) for the time interval T1 + low (low) for T1) / 2
• Reference [for the current bar T] = (high for T2 + low for T2) / 2
• First proactive[shifted forward from the current bar by T2] = (Reference to the current bar T + Rotation line in T) / 2
• Second proactive[shifted forward by T2 value] = (T3 high + T3 low) / 2
• Lagging [shifted back by T2] = closing price of the current bar T

If the calculations are not entirely clear, ask questions in the comments, we will understand in more detail. Let's move on to practice...

How to use the Ichimoku indicator - important trading nuances

Beginners. To use Ichimoku, register on the broker's website, download and install the MetaTrader trading platform. This indicator is classic and is already preinstalled in the terminal. Installation on the chart is done in a standard way: "Insert → Indicators → Trend → Ichimoku Kinko Hyo".

Timeframes. Initially, the indicator was developed by the author for weekly trading periods on stock exchange Japanese index "Nikkei 225". In Forex, it is also used primarily for large intervals, but not necessarily so large. I recommend using it on intervals of at least H1 (I like to use it on H4-D1).

Currency pairs- as mentioned above, you can use any.

"Ichimoku Kinko Hayo" is multifaceted in use and is designed to give the trader a complete "picture" of the market at one glance at the chart. First of all, this is the definition of a short-, medium- and long-term trend or the presence of a flat; support and resistance levels. In addition, the indicator also acts as an oscillator.

Consider each aspect of the application in more detail ...

Determination of a trend / flat

The global trend is determined by the position of the price chart relative to the "cloud". The short-term trend is determined using the red Tenkan Sen line, and the medium-term trend is determined using the blue Kijun Sen. The direction of the lines up / down shows the direction, and according to the angle of inclination, the strength of the corresponding trend. The horizontal position of the lines indicates a flat in the market. Consider an example...

The screenshot above shows the predominance of a downward (“bearish”) trend, when the price is below the “cloud” and the lines are directed downwards, as well as an oppositely formed ascending (“bullish”) trend. In addition, we see marked flat (uncertainty) zones with ovals, when the moving averages have a horizontal position.

What else I would like to note on these lines ... If we compare them with regular moving averages with the same periods (EMA, indicated by a dotted line in the screenshot below), then we see that Tenkan Sen and Kijun Sen show the direction more clearly:

Predictability. Since the "cloud" is leading, it allows you to make a forecast of the future price movement. Below are examples of 2 forecasts for the continuation of the market trend:

Support and resistance levels

All the same red and blue lines, in addition to trend guides, also act as support and resistance, and "Kijun Sen" is stronger. In addition, the most powerful resistance or support are the lines of the cloud (primarily Senkoy Span "B") and the "cloud" itself. Consider an example:

In the image we see:

• small rebounds from the short-term and larger rebounds from the medium-term moving averages when the chart goes down, from which you can trade in the "sell" (note that the price when trading in this case should be under the "cloud", that is, we are trading with the trend)
• then we see the breakout of Kijun Sen and after a few candles the appearance of the Golden Cross signal (we will talk about it below) - this tells us about a significant trend correction or the beginning of a reversal
• then the price “breaks” into the “cloud” of the indicator, breaking through its lines one by one, and impulsively upwards with powerful 2 rebounds. With a high degree of probability, the forecast for further movement in this situation is up (here we are already trading only “buy”)

In addition, the "Senkou Span "A"" line also acts as support (resistance). Below is a rebound from this line, after which the downtrend continued:

Price "corridors"

Let's now pay attention to the price passing through the shaded area and between the moving averages:

The arrows above show price "corridors", in which it was possible to work, both inside between the blue and red moving averages, and inside the hatched area... As we can see, if the price on its way did not immediately bounce off the first line, then with a high degree of probability it will go further and to the next one.

Role of the oscillator

The green Chinkou Span line acts as an oscillator (and in fact, the same Momentum indicator). The essence of the Lagging, as an oscillator, is to show how much the price has deviated from its average value, indicating at the same time “overbought” or “oversold” of the traded pair.

The symbols in the screenshot say the following:

1. The zone is expanding, which means an increase in the "oversold" pair, which in turn signals an approaching correction or a change in trend.
2. The arrows indicate the further movement forecast - a correction to the "2" zone, a rebound from the orange part of the "cloud" and further downward movement.

If the “Chinkou Span” in the example above crosses the price chart during a correction, which in turn does not rebound from the “cloud”, then if the price breaks through the “Senkou Span "A"" (orange), the price may return to an upward movement in the near future , i.e the intersection of the green line of the candlestick chart is also significant. Also significant is the rebound of the chart from the Lagging one... Let's talk about this line in more detail when considering the signals...

Where "stop loss" and "take profit"

The use of "stops" and "takes" in individual signals will be more specifically for an example below ... In all other cases, use just "reasonable" loss limiting and setting goals, depending on volatility currency pair, the ratio of the size of the loss threshold and the expected goal (on the use of money management in Forex trading). For example:

• "Stops" can be placed as standard on the nearest price extremes (top or bottom) or use the nearest indicator lines, since they are support zones, and put "stop loss" beyond the border of one of the lines (blue or red - according to the situation). In addition, you can use the standard volatility indicator "Average True Range (ATR)" ("stop" - from 0.7 to 2 values ​​of the ATR indicator, depending on your nature of trading) and so on... Select specific rules directly for the used pair in the testing process.
• "Takes" - you can use ATR (from 1.5-2 indicators of the indicator); tighten the “stop” in the profitable zone as the price moves along the lows of the previous candles, exiting the market when it is worked out; trade until the opposite signal appears.

Parameter settings

As you already understood above, standard indicator parameters in the terminal the following:

• Rotation line period - 9 candles
• Line "standard" - 26
• Second preemptive - 52

If for some reason the preset colors do not suit you, you can change them to any of your own:

"Default" options are fine for periods H1-W1, but Hosoda selected these “standards” about 100 years ago (9 means one and a half 6-day working weeks in Japan; 26 is the number of working days in a month; 52 weeks in a year), so the settings can be rebuilt to modern manner, namely: "8 → 22 → 44"(starting from a week and a half) or "5 → 10 → 20"(instead of one and a half weeks, a week is taken as the minimum period). With these parameters, Ichimoku behaves more dynamically. Whether it's better or not is another matter; by testing, choose the most suitable for yourself (standard or alternative). In most cases, I like to use the default ones.

In addition, a number of traders also use the following options:

• M5: "71 → 144 → 288"
• M15: "36 → 72 → 144"
• H1: "12 → 24 → 102"
• H4: "8 → 15 → 60"
• D1: "5 → 10 → 20"

For example, 71 is the number of 5 minutes in 6 hours; 36 is the number of M15 at 9 o'clock and so on...

Ichimoku Signals

Advantage in that this system gives quite clear trading signals, which, in turn, are also not few - you can trade both short-term and medium-and long-term. From examples of effective use, one can cite the PAMM chart (what it is) from the rating of accounts, whose manager uses Ichimoku in trading.

Well, we have already considered a lot, it's time to move on to the most interesting thing - to the entry points (signals) that the Japanese assistant issues...

Tenkan Sen and Kijun Sen

These lines form 2 types of signals: crossing and lining up moving...

intersection. "Golden Cross" (buy signal)- the red Line of rotation crosses the Reference Line upwards; Dead Cross (sell signal)- the red line crosses the blue one from top to bottom:

The above signals mean a change or correction of the trend and are significantly significant, but not the strongest.

Where to put "stop" and how best to enter the market... You can enter “roughly” immediately after the signal appears, and put “stop loss” on one of the nearest troughs (tops) or behind the moving line:

Or a more "thin" entry option and placing stop orders - opening a trade with a pending order when the price breaks through the nearest top (bottom) on its way, which will be a confirmation of movement in the right direction, while the stop in this case will already be placed more productively:

The above shows the entries with the expectation of a direction reversal. If the trend has just begun, then it is hardly worth expecting a significant movement when entering against it, since the chart is most likely only being corrected:

Lining up. This situation is formed when the blue and red lines, together with one of the proactive ones, line up in the same direction - this means that the price moves in the same direction at short, medium and long-term distances, while trading is only in the direction of the trend. You can enter, both at the beginning of the movement immediately after lining up the lines, and look for more profitable entries (for example, trade rebounds from one of the lines):

Senkou span lines "A" and "B"

intersection. By analogy with the signals of the crossover of the Turning Line and the Reference considered above, the intersection of the Senkou Span "A" and "B" lines also forms an important event, indicating a change in the market trend, but only in a more global long-term perspective.

After the appearance of this signal, the color of the “cloud” changes to the opposite, and since its lines go ahead of the price chart, this makes it possible to prematurely see the expected direction of further movement:

In the chart above, in the areas circled by ovals, we could see the color change of the “cloud” ahead, which signaled a change in the trend, which, at the same time, occurred with the further price movement. A confirmation of the trend change is the crossing of the shaded area in the corresponding direction by the Tenkan Sen and Kijun Sen lines.

Breaking through the price of "Senkou Span "B"". This indicator signal is very strong... The indicated line in the "cloud" is the main one and shows a long-term trend, while "Senkou Span "A"" just "tacks" around it, forming hatched areas. Let's zoom in and look at the last image above:

In the image, the arrows indicate the rebounds from Senkon Span "B", and the ovals indicate its breakdowns, that is, we clearly see that this line is very important, and the breakdown of which, as noted above, is a very powerful signal to buy or sell, depending on the direction of the breakout candle, respectively.

In addition, although the importance of the First proactive is significantly lower, it also has significance (for example, as we can see, 2 rebounds from it are marked with lines on the chart).

Trading in the price "corridor"

The price "corridor" in "Ichimoku Kinko Hyo" refers to the areas inside the "Kumo", as well as between the red and blue lines. At the same time, it is considered that in these periods of time the market is flat. Trading in the "corridors" requires some "subtlety" and can be difficult for beginner traders.

Trading in the cloud- work from one area border to another.

The rules for the trader are as follows:

• "Kumo" should be wide enough
• If the price confidently enters the “corridor” and does not bounce, then it will most likely reach its opposite border (situation “2” in the screenshot below - the price first rebounded with a shadow, and on the second attempt it entered the area already confidently)
• If the price broke through (and even more so fixed) beyond Senkou Span "B", then you should not consider the direction of price movement again towards Senkou Span "A", but you should expect further movement in the direction of the breakout, possibly with a rebound from "clouds" (situation "3")
• The rotation line should be directed in the direction of the price movement (in the “1” situation, the “buy” entry signal should have been missed due to the downward direction of this line)

Trading between the Turning Line and the Reference similar to trading in "Kumo", but even more "thinner".

The situation in the image above:

1. The candle broke through Tenkan Sen - we are waiting for confirmation.
2. The price again returned to the red moving average, but rebounded and closed inside the lines, that is, a breakdown was confirmed (when working in Kumo, it is also desirable to work with confirmation - there will be many more missed signals, but the entries will be more effective).
3. Entering the market at the opening of the candle.
4. Stop at the red line (low of the previous candle at the time of entry).
5. Zone " take profit» - profit received.

In the corridor":

On the chart we see:

1. The price successfully bounced off the lower border and reached the upper one.
2. The price rebounded, but did not reach the target border.

Entrance is made at the opening of the candle after the signal one, which rebounded, striking the line with a shadow. Since these transactions usually occur against the trend (we pay attention primarily to the short-term Tenkan Sen), they are not considered particularly reliable and trading in these situations should be done with great care.

"Chinkou span"

Consider the signals that the Chinkou Span gives us - this is an intersection with the price chart, a rebound or a deviation from it...

intersection- a situation that indicates a change (or continuation) of the global trend. Accordingly, the passage of the green line through the price chart from top to bottom indicates the appearance of a downtrend and, conversely, “piercing” it with the price line from bottom to top, means the beginning of an uptrend.

Input filtering. The signal is not considered sufficient if at the time of the Lagging passing through the chart its slope is horizontal or very close to it - it is necessary to count on signals with a significant line slope in the corresponding direction of the expected trend. In addition, it is desirable that the crossing line pass through the body of the candle, and not along its shadows or between bars.

Given the filters, the signal is very rare, but strong.

Buy signals:

Sell ​​signal:

On the 2 charts above, the ovals show the places where the signals were formed, and the arrows show where the price chart was located at the moment and began to move in the expected direction (do not forget that the Lagging is shifted 26 candles back so as not to get confused when backtesting) .

Rebound"Chinkou span" from the price chart. Since the previous prices themselves are support and resistance levels, it is quite logical to trade from them, both a rebound and the intersection (breakout) discussed above.

Rebounds (rebounds) look like this:

As shown in the image above, there was a bounce in the place circled by the oval, and 26 candles ahead, the chart started to rise sharply.

Deviation Price lagging behind the chart. I already mentioned this situation when describing the use of the indicator... In case of deviation, the Chinkou Span acts as an oscillator, indicating that the traded pair is overbought or oversold. The stronger the green line, following the price, deviates from it, the more expected the trend correction is:

Ichimoku and Japanese candles

For efficient trading, Ichimoku Kinko Hyo signals are best confirmed by Japanese candlestick patterns...

Common models that talk about reversal of bearish and the beginning of bullish trends:

Popular candlestick patterns that speak of reversal of bullish and bearish trends:

Model examples trend continuation:

Note! The images show "ideal" candlestick patterns. In practice, it’s a little different, so you shouldn’t expect a 100% match of the model in the terminal with those given above. There are enough “non-ideal” ones, but the closer the combination of candles to the standard, the stronger and better the signal is considered.

Consider practical examples confirmation by candlestick patterns of Ichimoku indicator signals:

In the given example, you can see:

1. There was a rebound from the Senkou Span "A" line, which was confirmed by the formation of the "Nippers" candlestick pattern.
2. After receiving the signal, we enter at the opening of the candle.
3. “Stop loss” is placed on the extremum of the nearest candles (in this case, the nearest “trough”).
4. If we trail the stop under the low of each rising candle to trade in the medium term, then there would be a way out.
5. If we open longer-term and run a “stop order” on the blue moving average, then the exit would be here.
6. A series of “bullish” candlestick patterns is shown, indicating the continuation of a growing trend... And since the price is above the “cloud”, which is colored orange, which indicates an uptrend, these patterns could be considered as signals for additional purchases, for example , or as confirmation of confidence in further growth couples.
7. The emergence of a new signal to buy - the price bounced off the "Chinkou Span "B", which was again confirmed by the formation of the "bullish" Tongs model.

This example means the following:

1. The formed "bearish" patterns warn of a trend change to a downtrend and confirm the future Ichimoku signal.
2. The first Preemptive break - we play "short" to the second Preemptive with a "stop" on the first.
3. Senkou span "B" is broken down, which is a sell signal. At the same time, note that the Bearish Engulfing pattern has formed. We enter at the opening of a new candle; “stop”, since there is no nearest obvious extremum (in this case, the top), we put it on the maximum of the impulse candle that formed the breakdown.
4. Models are shown, indicating a further continuation of the downward movement. In addition, some of them are combined with a rebound from the red moving average. Very good signals for additional entries in the direction of the trend continuation (if initially they entered in the medium term and the deal was closed earlier, then these places are good signals for new deals).
5. Shown is the situation in which experienced trader will notice that with each new “bearish” pattern, the strength of the falling candle weakens, which may indicate a change in trend or a significant correction in the near future.

To confirm the Ichimoku signals above, we looked at some patterns from the analysis of Japanese candlesticks so that the principle itself is clear... More information about candlestick patterns can be obtained, for example, in the corresponding training course of a broker (only, I recommend the presenters, since their training information, and services in general, are generally much better). Pay attention to a good trading school (link to a course on candlestick analysis (the course is free; at the time of writing, it takes place once a week; form of training: online or face-to-face)).

conclusions

Ichimoku Cloud, in my personal opinion, is a good professional tool for technical analysis of financial markets, and together with Japanese candlestick patterns, it is a sufficient foundation for developing your own trading strategy that can work for a long time and bring stable profits. Of course, all this is true if you correctly understand the principles of its use and have sufficient practical trading experience (current or gained in the future) to translate trading plans into profit. This is a respected "Japanese classic" that undoubtedly deserves special attention.

I was happy to provide information. I wish you success in trading and all the best!

Thank you for attention! Sincerely,
Nikolai Markelov, author

Topic discussion

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Many novice traders consider the Ichimoku indicator too complicated and do not use it in trading. This impression is created due to the fact that the tool consists of five lines at once, forming different levels and zones. But is this indicator so complicated as to refuse signals, or is the instrument still worth spending time on learning it?

Description and features of the Ichimoku Kinko Hyo indicator

The Ichimoku indicator was developed much earlier than most technical analysis tools: it was created by the Japanese trader and analyst Goichi Hosoda back in the 30s of the last century. Of course, in those years, all constructions were made by hand, and this influenced the appearance of the instrument. After calculating the indicator values ​​using special formulas, the points on the chart were connected by straight lines, therefore, unlike the classic moving averages, the Ichimoku lines have a somewhat “broken” appearance.

The Ichimoku Kinko Hyo indicator consists of 5 lines, each of which is built according to a specific formula:

1. Kijun (blue line). To calculate it, at each point, the arithmetic average of the minimum and maximum of the candle is taken, and then the average value of this parameter is calculated for the last 26 candles. In simple words, this is an analogue of the 26-period moving average.
2. Tenkan (red line). It is built on the same principle as Kijun, only with a period of 9.
3. Chinkou (green line). The line drawn at closing prices, shifted 26 periods back.
4. Senkou A (Up Kumo, orange line). Average of Tenkan and Kijun shifted 26 periods ahead.
5. Senkou B (Down Kumo, gray line). The arithmetic average of the high and low of each candle for 52 periods, shifted 26 periods forward. Forms a common area in conjunction with Senkou A.

Formula for calculating the Ichimoku indicator

Tenkan-sen=(Max(High,N)+Min(Low,N))/2
where:

Max(High,N) - the highest of the highs for a period equal to N - intervals (for example, N days)
Min(Low,N) - the smallest minimum for a period equal to N - intervals
N - period length

Kijun-sen=(Max(High,M)+Min(Low,M))/2
M - period length

Chinkou Span– Current Close moved back by M

Senkou Span A = (Tenkan-sen + Kijun-sen)

Senkou Span B = (Max(High,Z)+Min(Low,Z))/2, shifted forward by M intervals
Z is the length of the intervals

The Tenkan and Kijun lines, individually and together, work as moving averages, their mutual intersections, as well as intersections with the price chart, give signals to buy and sell. Two Senkou lines form a support or resistance zone, being the first and second levels, depending on the trend.

Installing and configuring the indicator

The Ichimoku indicator is included in the standard package of tools trading platform MetaTrader 4, so installing it is quite easy. It does not need to be searched on the Internet and downloaded from third-party resources, just open the "List of indicators" tab on the terminal toolbar and select Ichimoku Kinko Hyo in the "Trend" category.

Three parameters can be changed in the settings window: the periods of the Tenkan, Kijun and Senkou B lines. Senkou A is calculated from the Tenkan and Kijun values, so it does not have its own parameter in the settings. Chikou is completely dependent on the closing price. The offset of each line is set by default and cannot be changed.

After the tool is installed on the chart and configured, you can proceed to trading on the Forex market.

Trade by Ichimoku Kinko Hyo

Ichimoku is a complex indicator that gives the trader many different signals. Some of them are quite simple, such as the "Golden Cross" that occurs when the Tenkan crosses the Kijun from the bottom up and gives a buy signal. A dead cross, on the other hand, is a sell signal and is formed when the Tenkan line crosses the Kijun from top to bottom.

You can also trade inside the “cloud” formed by the Senkou A and Senkou B lines (it is shaded on the chart). When the market is in a flat (this is signaled by Tenkan, located horizontally), you can open quick scalping trades when the price bounces from one Senkou line and rushes to another.

However, in order to make trading more efficient, it is recommended to open deals on several signals at once, formed from the interaction of the indicator lines with the price chart and with each other.

A simple, but already quite optimized trading strategy for Ichimoku Kinko Hyo looks like this (using the example of opening a buy deal):

1. Tenkan line crosses Kijun from bottom to top.
2. The price chart crosses both lines in the same direction.
3. The price pushes up from the “cloud” formed by the Senkou lines.

The price bounced off Senkou and broke through Tenkan and Kijun from the bottom up

In this case, the indicator gives three signals at once, which increases the likelihood of making a profitable trade. At the same time, no additional indicators need to be installed on the chart, all technical analysis is carried out using one tool.

Despite the complexity of Ichimoku, some professional traders combine it with other indicators. This approach requires more experience and speed of decision-making, however, after some practice, it will not seem too difficult even for a novice trader.

Strategy Ichimoku + Stochastic

Ichimoku - trend indicator, so it is most logical to supplement its signals with an oscillator filter. Ichimoku works best in conjunction with the Stochastic, since RSI, although it is a fairly popular indicator, very rarely gives signals, which means that coinciding readings of two indicators will be even more rare.

In this strategy, the stochastic oscillator will warn the trader against making deals at those moments when the trend has already dried up, and the Ichimoku signal is clearly late.

Sell ​​trades using the Ichimoku + Stochastic strategy are opened under the following conditions:

1. The lines on the chart line up in the order Kijun-Tenkan-price.
2. The price is repelled from the "cloud".
3. Stochastic is not oversold, the oscillator lines are directed down.

The strategy is quite versatile and suitable for trading on almost any timeframe, except, perhaps, M1 and M5. As a trading asset, you can use Forex major pairs, as well as CFDs on gold and silver.

Advantages and disadvantages of Ichimoku Kinko Hyo

Ichimoku is a fairly versatile and effective tool, moreover, it is more time-tested than any other technical analysis indicator. Ichimoku Kinko Hyo can be used to find signals in both Forex and the stock market, as well as when trading cryptocurrencies.

The main drawback of Ichimoku is common to almost all trend indicators - its signals are very often late. Lines built on averaged values ​​show the previous price values ​​in a modified form, but they cannot accurately and timely predict the moment of a new trend development. That is why Ichimoku must be combined with an oscillator, even if it seems that this Japanese instrument has enough signals of its own.

Trade on financial markets involves a high level of capital risk. In order to reduce risks, it is recommended to strictly follow the rules of money management and always set Stop Loss. All decisions that a trader makes while working on Forex are his personal responsibility.

Ichimoku is an indicator represented by a combination of five lines, three of which are moving averages, and two are their derivatives. Ichimoku not only determines the presence, but also provides information about the location of the zones, and also determines the pullbacks of the trend. The Ichimoku indicator was developed in 1930 by the Japanese analyst Goichi Hosoda (pseudonym Sanjin Ichimoku), and presented to the public only in 1960 as a behavior analysis tool. IN trading terminal The Ichimoku QUIK indicator is represented by five lines on the price chart, two of which form the so-called “cloud” (the range between two lines shaded with a dotted line).

Rice. 1. Displaying the Ichimoku indicator in the QUIK trading terminal

Ichimoku indicator logic

Each of the indicator lines has its own name and construction method and, accordingly, its own different semantic load:

Tenkan - moving average of the median price (Median Price - the sum of the maximum and minimum, divided by two) with a period of 9. In standard form, it is a purple line. Tenkan is the fastest of the Ichimoku lines and shows the current trend with its slope (up slope - uptrend, down - downtrend, sideways - flat).

Kijun - moving average of the median price over a longer period of time (usually 26). Kijun is usually drawn as a red line that indicates the current price direction. So, if the price is above Kijun, then the uptrend is more likely to continue than change. If the price is below Kijun, the downtrend is in force and is likely to continue. If the price crosses Kijun, this is evidence that the current trend is already in question. In fact, the Tenkan Kijun intersection duplicates the logic of the intersection of two moving averages (EMA) of different periods, thereby giving signals to make transactions in accordance with the direction of the intersection.

Senkou Span1 is the first line of the "cloud" and a derivative of Tenkan and Kijun, since it is their average value, shifted forward by the Kijun (26) period. Senoku Span1 is usually displayed in blue and functions as support/resistance for the current trend.

Senkou Span2 is the second line of the "cloud" and the slowest of the indicator lines: its averaging period is 52, in addition, Senkou Span2 is shifted forward by the Kijun (26) calculation period. Performs the function of the second support/resistance line of the current trend. Usually displayed in green.

At its core, the “cloud” formed by the Senkou Span1 and 2 lines is a trend support/resistance zone. And also - an "indicator" of the trend: if the price is in the "cloud" - there is a flat in the market, and if the price is outside the "cloud" - there is a trend in the market (if the "cloud" is at the top, then the trend is down, and if it is below, then it is up) . The color of the "cloud" also indicates the current trend. If the cloud is colored in the color of the first line (blue), then the market is in an uptrend, and if the color of the second line (green) is a downtrend.

Chinkou - a line formed by closing prices of periods shifted back by Kijun (26). Chinkou is usually displayed in brown. If the line crosses the price from the bottom up, this is a signal to buy, if from the top down - to sell.

Ichimoku Trading Signals

The Ichimoku indicator gives the strongest signal if the price was in the "cloud" and left its border. In this case, it is believed that the market has come out of the flat and has become a trend. The transaction is carried out in the direction of this breakdown with a stop order placed behind the second (far) border of the "cloud".

Rice. 2. Trades on the Ichimoku indicator when the price leaves the cloud

It is believed that if the Tenkan, Kijun Senkou Span1 lines are located in series and parallel to each other, then a stable trend has set in on the market. If the price rolls back to one of these lines during the development of the trend, it is advisable to add or restore positions along the trend.

Rice. 3. Trading Ichimoku when the lines touch in a stable trend

Weaker signals will be signals to make deals when the Tenkan and Kijub lines cross (in the direction of the intersection) and the price crosses the Chinkou line.

Rice. 4. Trades on the Ichimoku indicator at the intersection of Tenkan and Kijun and at the intersection of the price and Chinkou

Displaying the Ichimoku indicator in QUIK

Now - about how to use Ichimoku in the QUIK trading terminal. To display the indicator in the program, you should press the Insert key and open the "Adding Chart" window, in which you should select the Ichimoku indicator from the list of available indicators. Then you should click on the "Add" button.

Rice. 5. Adding the Ichimoku Indicator in the Add Chart Window

Upon completion of the specified actions, five indicator lines will appear on the price chart.

Rice. 6. Basic display of Ichimoku

To edit the Ichimoku indicator, press the key combination Ctrl+E and open the "Edit chart settings" window. In this window, select the area containing the indicator and move to the "Parameters" tab, where you can set the display color and parameters for calculating the indicator lines. Changes will take effect after pressing the OK button.

Rice. 7. Editing Ichimoku indicator settings

Output

Ichimoku is very interesting trading system, which is based on moving averages and shows that even basic indicators can produce very productive trading systems.